Questions from the Sunday Star Times regarding NZDF pay

The following are questions from the Sunday Star Times regarding NZDF pay, here are the responses:

Introductory comments

The New Zealand Defence Force operates a Remuneration Framework that has a primary objective to enable the recruitment and retention of the right people with the right skills, so the NZDF can meet the military outputs expected of it by Government.

The NZDF achieves this by ensuring that the remuneration spend is targeted to attract the right people to join the Defence Force, and that remuneration is not a common factor in people choosing to leave.

The goals of the remuneration framework are:

Fiscal control: Provide an annual review process that allows CDF to retain fiscal control and where necessary prioritise against competing fiscal priorities;

Recruitment and retention: Facilitate recruitment and retention of the right personnel through fair but competitive remuneration;

Internal equity: Within the NZDF similar jobs/trades and skills are remunerated equitably;

Recognition: Recognise both the attainment of relevant additional skills and high performance at the appropriate level within NZDF; and

Clarity: NZDF members understand how they are remunerated.

When making decisions about remuneration, under the Defence Act the Chief of Defence Force must consider if the proposal is fair to personnel, the Defence Force, and the taxpayer, and is the right thing to do. The Defence Force is accountable to the Government for its expenditure on personnel. It must ensure that Treasury, the State Services Commission and other central agencies are made aware of ongoing and future personnel costs, and that these are notified and quantified in a robust and timely manner. The Defence Force’s Remuneration Framework must be able to react to labour market forces and make timely recruitment and retention interventions as required. To achieve this, the NZDF reviews remuneration levels on an annual basis.

In response to questions 6 and 9 below relating to fair pay rates and the personnel earning more than $100,000, pay rates are commensurate with the needs of the Defence Force to achieve its military outputs.

With regard to your specific questions, see below, except answers to 6 and 9, which have been covered in the paragraph above.

1. I was wondering what the pay band is for the different ranks?

The tables below cover the minimum and maximum salary values for each rank based on the tables effective 1 July 2018:

2. The amount of people in salary bands earning six figures or more has increased by 350 from 2017 in 2018. Why was there such an increase in people earning a six figure salary?

The number of people earning over $100,000 in 2018 increased primarily due to increases in remuneration bands which are passed on to both Military and Civilian members. In addition, Regular Force pay progression and Civilian performance pay increases increased member’s remuneration. A further reason was Regular Force promotions and Civilian appointments between $100,000 and $140,000.

3. There was an additional 10 people in 2018 who were earning more than $200,000 compared to 2017. Can I have a break-down of what roles within the defence force come under this pay bracket and why was there an increase of 10 people earning this within a year?

NZDF cannot provide the specific roles in this pay bracket as it would it would identify individuals remuneration. The new roles paid above $200,000 are specialist leadership roles within areas such as Defence Estate and Infrastructure, Legal Services and Information Security and some Dental and Medical roles.

4. Tim Keating finished his role on $670,000 to $679,999, is anyone in the Defence Force paid more than that?

No

5. What is Air Marshal Kevin Short’s pay band?

NZDF does not have a pay band for the Chief of Defence Force. The remuneration for this role, and for Service Chiefs, is set by the Remuneration Authority which is an independent body set up by Parliament.

6. What does Air Marshal Kevin Short think of the increase in personnel earning more than $100,000?

See introductory comments.

7. For personnel who earn between $30,000 to $40,000 this amount has decreased and so has the amount of personnel being paid between $40,000 to $50,000, why is this the case?

The majority of personnel paid between $30,000 and $40,000 are new recruits who are paid at minimum wage while completing their 16 week basic training course, so this number fluctuates dependant on the number of recruit courses that are run.

The number of members paid within the $40,000 to $50,000 bracket is decreasing due to NZDF’s move to raise all civilian employees to living wage. This move commenced in 2018 and will be completed in 2019. Note, Regular Force members are already paid above living wage on completion of basic training / part way through Officer Cadet training.

8. The overall wage bill has also gone up, with the 2018 wage bill now more than one million dollars compared to $945,676 it was for the group in 2017. Has defence force spending for wages also increased and if not how are they covering this increase in wages?

The numbers stated in your question are incorrect. The wage bill for 2017 was $945,676,000 and was $1,010,975,000 in 2018. As indicated by these numbers, spending on wages has increased, and this additional cost was met within the Vote Defence funding.